Anne Arundel County schools Superintendent Carol S. Parham said yesterday that she felt vindicated by an audit that showed school officials have been honest about how they spend their money.

Former County Executive John G. Gary, who was voted out of office on Nov. 3, repeatedly demanded an audit of the county schools last spring and summer, claiming that the Board of Education was wasting and hiding money.

County Auditor Teresa Sutherland's office released an audit yesterday that shows that the public schools had accurately reported to the county administration how much extra money the schools had and how many teachers they had hired.

"This means that we are deserving of the public's confidence and trust in how we handle the money appropriated to us," Parham said.

Education spending was the hottest issue in the recent county executive's race, with the victorious candidate, Janet S. Owens, saying that her opponent's demands for an audit were unnecessary and showed that he lacked respect for the school board.

Owens said that she was encouraged by her preliminary examination of Sutherland's audit.

"I'm delighted delighted for Dr. Parham and the school board," Owens said.

"This is not just good news for our schools, but for our citizens as well."

Gary, however, said the audit was meaningless.

All the county auditor did, he said, was look at account balances the school board gave her.

The former county executive said that he wanted a much broader and more in-depth state audit, but that the County Council voted to request a narrower county audit.

"This was a useless exercise," Gary said.

"I still think we need to do a state audit, no matter how much it costs."

The audit, dated Nov. 24, examined a few areas of the school board's budget in fiscal years 1996 through 1998.

The report found that the school board's account for books and other teaching supplies had $21,426 in excess money on June 30, out of a total of $7.5 million budgeted for these materials.

The audit also said that the schools had hired 70 teachers, the same number outlined in the county's budget.